Microsoft posted second-quarter results for fiscal year 2025 that surpassed market forecasts, propelled by strong gains in cloud-related sales. The company’s financial disclosure underscored the significant resources being devoted to meet surging demand for AI infrastructure, as global competition in this sector intensifies.
For the quarter ending January 29, 2025, Microsoft reported total revenue of $69.6 billion, marking a 12% increase from the same period a year earlier. Net profit reached $24.1 billion, with diluted earnings per share advancing 10% year-over-year to $3.23.
Examining segment results, the Intelligent Cloud division delivered $25.5 billion in revenue, reflecting annual growth of 19% and benefiting from a 31% increase within Azure and other cloud services. Revenue from Azure and other cloud services grew 39%, slightly below the segment’s performance in the fiscal first quarter of 40%.
Revenue from Productivity & Business Processes climbed 14% to $29.4 billion, bolstered by persistent demand for Office 365 and the Copilot suite. Meanwhile, the More Personal Computing segment was steady at $14.7 billion, with gains in Windows OEM neutralized by fewer Xbox hardware sales.
Microsoft highlighted continued progress in scaling its artificial intelligence business, reporting an annualized AI revenue run rate exceeding $13 billion, an increase of 175% from the previous year. Contributions from Azure AI offerings were singled out as a key driver behind the cloud division’s robust expansion. Despite this momentum, the company acknowledged ongoing capacity pressures as it works to address rising AI-related demand.
Capital expenditures for the quarter rose nearly 80% year-over-year to $22.6 billion, primarily attributed to the expansion of Microsoft’s global data center network. The jump in spending put pressure on the company’s free cash flow. Leadership maintained that these investments are central to seizing longer-term advantages as the industry transitions decisively toward AI-centric platforms.
Looking toward the upcoming quarter, Microsoft projects Azure growth to remain strong, with anticipated gains of 31% to 32%, reinforcing confidence in its current cloud and AI-oriented direction.
